The EUR/USD pair dropped to its lowest level since May 30 at 1.1130 during the early trading hours of the NA session and went into a consolidation phase. The pair has been spending the last few hours in a 20-pip range and is now trading at 1.1155, down 0.56% on the day.

The US Dollar Index started a sustainable rise in the early trading hours of the European session as the positive impact of yesterday's FOMC statement were felt on the greenback once again. After receiving an additional boost from the upbeat data in the NA session, the index refreshed its weekly high at 97.55. Following the upsurge, the index erased some of its gains possibly amid profit taking as no fresh catalysts were present. At the moment, the index is at 97.40, up 0.5%.

Tomorrow's economic calendar will feature Consumer Price Index for the euro area. The market consensus is for the inflation to drop to -0.1% in May from 0.4% in April. If the inflation contracts as expected, the pair could continue to fall as the data would confirm the ECB's stance to keep the amount of QE unchanged.

Technical outlook

FXStreet analyst Valeria Bednarik argues that the pair is technically bearish short term, poised to extend its decline this Friday, particularly on a break below 1.1109, May 30th low and the immediate support. She further adds that supporting the decline are technical readings in the 4 hours chart, with the price extending below its 20 and 100 SMAs, while technical indicators head south near oversold readings, and the next big support comes at 1.1075, the low set on May 18th, level that if gets broken, will likely open doors for a steeper correction towards the 1.1000 threshold, especially if EU May inflation, set to be released this Friday, misses expectations.

According to the analyst, supports could be seen at 1.1110, 1.1075 and 1.1030 while the resistances align at 1.1160, 1.1200 and 1.1245.

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